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Hoteliers cook up a £2bn Reit plan

THE property entrepreneur Richard Balfour-Lynn is working with Royal Bank of Scotland on plans to create a £2 billion real-estate investment trust (Reit) focused on the hotel sector.

Balfour-Lynn has appointed Deutsche Bank to carry out a strategic review of his £1.3 billion hotel portfolio, which includes landmark properties such as the Grand in Brighton and Cavendish in Mayfair. The properties were acquired after his privately owned Alternative Hotel Group splashed out £767m to take the De Vere hotel group private last summer.

City sources said the talks with RBS were serious and, despite being at a preliminary stage, all sides were hopeful the plan would come to fruition.

Under the proposals RBS would become a partner in the new tax-efficient Reit and could inject about £1 billion of its own hotels, including a portfolio of Hilton hotels.